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Sunday, 26 March 2006

The IPKat has retrieved this gem from BAILII: it's Liffe Administration and Management v Pinkava and another [2006] EWHC 595 (Pat), a rare decision of the Patents Court (Mr Justice Kitchin) last Friday on employees' inventions.

Pinkava, an employee of Liffe, the company that operated the London futures exchange, devised a system that permitted trading to take place through an electronic exchange of various types of financial instruments (credit default swaps, credit index swaps, interest rate swaps and overnight index swaps). Maintaining that he owned the inventions, Pinkava filed patent applications in the United States, where business methods are patentable, and later assigned them to his own company, De Novo.

Liffe sued Pinkava for misuse of confidential information and breach of contract, also seeking a declaration that it owned the US patent applications. Pinkava then commenced proceedings in the UK Patent Office for a declaration that he owned the inventions: these proceedings were then transferred to the High Court. Liffe denied that the inventions belonged to Pinkava, arguing that the inventions were made in the course of the Pinkava's duties and thus belonged to it under s.39(1) of the Patents Act 1977 (which provides that inventions made by employees in the course of employment duties, from which patents can reasonable be expected to result, belong to the employers).

Kitchin J allowed Liffe's claim. When applying the section 39 test, it was necessary to have regard to the normal duties of the employee and any duties specially assigned to him outside his normal duties. It was then necessary to ask whether the inventions in issue were made in the course of those duties and, if so, whether the an invention might reasonably be expected to have resulted from the employee carrying out those duties.

On the facts of this case, Pinkava's inventions were not made in the course of his normal duties but were made in the performance of a duty that had been specially assigned to him: the duty to create an exchange tradable credit derivative. Also, under the circumstances an invention might reasonably have been expected to result from the carrying out of those duties.

The IPKat notes how broadly applicable are the provisions that protect employers' rights in inventions made by their employees. Merpel reminds readers that the UK law, which was amended in 2004 to make it easier for employee inventors to secure a share of the benefit derived from an invention by their employers, still provides difficult obstacles to be overcome before a successful claim can be met.

Neesam were the parallel importers into the EEA of motorbikes made by, and bearing the trade mark of Honda. These proceedings concerned certain motorbikes imported from Australia, the US and Hong Kong, which authorised motorbike dealers from those countries were not allowed to sell outside their recognised territory.

Honda sued for trade mark infringement, seeking summary judgment. Neesam resisted, arguing that the consent of Honda's subsidiaries in supplying the bikes had been enough to bind Honda itself, or at least that consent to their importation and resale could be inferred.

Lewison J gave summary judgment in part, there being no reasonable prospect that Neesam's defence could succeed in relation to bikes imported from the US and Hong Kong. The IPKat is looking forward to getting hold of the transcript of this judgment so that he can see why Australia is different.

5 comments:

Anonymous
said...

If, according to Section 1 of the Patents Act, a program for a computer is not an invention for the purposes of the Act, does this not mean that the provisions of Section 39 are not applicable since according to Section 1, there is no invention?

Dear Confused, Section 43(4) of the Patents Act says "Any references in sections 39 to 42 above to a patent and to a patent being granted are respectively references to patent or other protection and to its being granted whether under the law of the United Kingdom or the law in force in any other country or under any treaty or international convention." So by necessary implication Section 1 is not the be all and end all for interpreting Section 39...

Dear Anonymous. I think Confused has a right to remain confused notwithstanding your kind attempt at an explanation. s43(4) only assists in the interpretation of "patent" and references to the granting of a patent. It gives no assistance as to the interpretation of an "invention". s39 is about ownership of "inventions" and not patents and s1(2) expressly applies to the interpretation of "invention" for the whole of the Patents Act 1977 and excludes methods of doing business and so forth from the term.

Therefore, if anyone can reconcile the decision in Liffe with Pinkava with this fact. The point does not seem to have been discussed in the case from my scanning of it. It may therefore be wrongly decided.

S1 as a whole is entitled "Patentable inventions" and s1(2) is referred to in s1(1)(d) in that context. Also s1(2) states "but the foregoing provision shall prevent anything from being treated as an invention for the purposes of this Act only to the extent that a patent or application for a patent relates to that thing as such". I therefore believe the wording of s43(4) is adequate to cover "invention" in s39... In any case the judgement does discuss this.

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